Which of the following is another term commonly used to describe a company's liabilities?

• A. Revenues
• B. Obligations
• C. Equity
• D. Assets

Answer: (B)

Verified step by step guidance

1. Understand the concept of liabilities: Liabilities represent amounts a company owes to external parties, such as creditors, suppliers, or lenders. They are obligations that must be settled in the future, typically through the transfer of money, goods, or services.
2. Review the term 'obligations': In financial accounting, liabilities are often referred to as obligations because they represent the company's responsibility to fulfill certain commitments or debts.
3. Differentiate liabilities from other financial terms: Revenues refer to income earned from business operations, equity represents the owners' claim on the company's assets, and assets are resources owned by the company. None of these terms describe liabilities.
4. Recognize the correct terminology: The term 'obligations' is commonly used interchangeably with liabilities because it emphasizes the company's duty to settle debts or fulfill commitments.
5. Apply this understanding to the question: Based on the explanation, the correct answer to the question is 'Obligations,' as it is another term commonly used to describe a company's liabilities.